INTRODUCTION
COMPANY INTRODUCTION
Cai Lan Oils and Fats Industries Company (CALOFIC) is a joint venture between Vietnam Vegetable Oils Industry Corporation (VOCARIMEX), a state-owned enterprise under the Ministry of Industry and Trade, and Singapore's Wilmar Group.
Founded in 1996 with an initial investment of USD 22 million, Cai Lan Oils and Fats Industries Company (CALOFIC) has grown to an impressive USD 75.8 million, establishing itself as a leading joint venture in Vietnam The company has become a cornerstone of the vegetable oil manufacturing and processing industry in the country With two factories located in Quang Ninh and Ho Chi Minh City, as well as branch offices in Hanoi and Ho Chi Minh City, CALOFIC employs over 1,000 individuals nationwide.
Cai Lan Oils and Fats Industries Company (CALOFIC) has consistently enhanced product quality and embraced new technologies since its inception, solidifying its market position As a leading brand in Vietnam, CALOFIC offers a range of popular vegetable cooking oils, including NEPTUNE 1:1:1 for health and quality, SIMPLY for a healthy heart, MEIZAN for delicious food and good health, KIDDY for nutrition and smart growth, and CAI LAN, which symbolizes good fortune in the kitchen and home.
Besides, CALOFIC also possesses various kinds of cooking oils packed in cans of different sizes; shortening packed in carton boxes; and also margarine for food and bakery.
PROBLEM IDENTIFICATION
As per Viet Nam - Lao - Cambodia Association for Economic Cooperation Development (VILACAED) total trade between Vietnam and Cambodia in year
In 2009, Vietnam's exports to Cambodia reached USD 1.33 billion, while in the first half of 2010, this figure was USD 862 million, with USD 728 million specifically attributed to exports to Cambodia Currently, Cambodia ranks as the 16th largest export market for Vietnam, and Vietnam is the fourth largest exporter to Cambodia.
Cambodia presents a promising market for Vietnamese companies, with notable investments from firms such as Viettel, FPT, and Sacombank Following this trend, Cai Lan Oils & Fat Co Ltd (Calofic) has entered the Cambodian cooking oil sector, offering a diverse range of brands including Simply and Neptune for the premium market, Cai Lan for budget-conscious consumers, and Kiddy, specifically designed for children aged 6 months to 8 years.
Calofic launched its "kiddy" oil brand in January 2011, becoming the first company to introduce cooking oil specifically designed for children in the Cambodian market Initial sales were promising, but there was a noticeable decline in sales quantities in the following months.
This project aims to identify the causes behind the decline in sales of the "Kiddy" oil brand and to develop effective strategies for deeper market penetration in Cambodia.
RESEARCH OBJECTIVES
This research aims to identify the reasons behind the decline in sales, assess the demand for cooking oil specifically designed for children, and analyze the factors influencing consumer purchasing decisions The findings will inform the development of a market penetration strategy for the "Kiddy" oil brand in Cambodia for the upcoming year.
RESEARCH METHOD
This project will be used the following research method:
1.4.1 At Desk research (Secondary Data)
Desk research, also known as secondary research, involves utilizing existing data gathered for different projects, often by other researchers This method is cost-effective, as it eliminates the expenses related to conducting surveys or other data collection tools Additionally, desk research can be completed more swiftly and with fewer resources compared to primary data collection.
Secondary data sources can be classified into two categories: internal secondary data, which originates from within the organization, and external secondary data, which is published by other entities.
The project will be used the secondary data from internal and external source like sale number, market stituation…to statistic and analysis
Quantitative research involves using a sample size that accurately represents the target population, allowing for reliable conclusions and analyses with minimal variation in the data Tables are available to indicate the relevance intervals for data based on the sample size used.
Interviews can be conducted in person, over the phone, or increasingly through the internet, offering a faster and more cost-effective approach compared to traditional postal questionnaires However, online interviews may introduce biases due to reduced oversight by research specialists.
For this project, it will be used the questionnaires to collect the data from the consumers
+ Identify whether consumers in Cambodia use the nutritious food for their kids which including oil, what kind of nutrition is important to kids
+ Where they purchase nutritious food for their kids
+ What are the factors which affecting to the buying decision of buyer for nutrition product for kids?
B) Place Of Research: Phnom Pend, Cambodia
SCOPE OF RESEARCH
This research targets families in Phnom Penh, Cambodia, with children aged 6 months to 8 years Based on the findings from a comprehensive market survey, the project will outline strategic recommendations for the years 2011 to 2015.
“kiddy” brand in order to help “kiddy” brand can penetrate deeply into Cambodia market.
THESIS STRUCTURE
The thesis will be arranged into 5 chapters
This chapter will introduce about the company background, problem statement, and research method of project
This chapter will covers literature referring to this study Theory about Ansoff Growth Strategy Matrix, consumer behavious and buying decision-process, The marketing mix strategy (4 Ps), SWOT, Branding
CHAPTER 3: CURRENT SALE STATUS OF “KIDDY” OIL BRAND
This chapter provides an overview of Cambodia, focusing on the cooking oil market and the current sales status of the "Kiddy" Oil brand Additionally, it includes an analysis of market surveys and a SWOT analysis for Kiddy Oil, offering insights into its competitive position in the Cambodian market.
This chapter will mention about the strategies on branding, pricing and distribution channel which help “kiddy” brand to increase the sale volume
In this final chapter, there will be some conclusions on the project.
LITERATURE REVIEW
ANSOFF GROWTH STRATEGY MATRIXES
Ansoff's matrix outlines strategies for business growth by examining existing and new products in both current and new markets, resulting in four distinct product-market combinations.
Figure 2.1: Ansoff Growth Strategy Matrixes (source: Internet)
The firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share
The market penetration strategy is the least risky approach as it utilizes the firm's existing resources and capabilities effectively In a growing market, maintaining market share can lead to growth, especially if competitors hit capacity limits, creating opportunities for increased market share However, this strategy has its limits, and once the market nears saturation, firms must adopt alternative strategies to sustain growth.
The firm aims for growth by introducing its existing products to new market segments and geographical areas This market development strategy is beneficial when the firm's strengths are tied to the product itself rather than its familiarity with a particular market However, entering new markets carries higher risks compared to a market penetration strategy.
Firms often pursue a product development strategy aimed at their existing market segments when their strengths align more closely with their customer base than with specific products By leveraging these strengths, companies can create new products tailored to their current customers However, like entering new markets, developing new products involves higher risks compared to merely increasing market share.
Diversification is a high-risk growth strategy that involves developing new products for new markets, but it can lead to significant returns if successful This approach allows firms to establish a presence in attractive industries while also mitigating overall business portfolio risk.
UNDERSTANDING CONSUMER BEHAVIOUS
Consumers are at the heart of every marketing decision, making their understanding crucial for business survival By analyzing consumer behavior and motivations, marketers can identify the factors that influence purchasing decisions, determine what meets consumer needs, and understand why consumers choose one product over another.
According to Philip Kotler in "Marketing Management – 12th Edition," a consumer's purchasing behavior is shaped by various factors, including cultural, social, and personal influences, with social factors having the most significant impact.
Culture, subculture, and social class significantly shape consumer buying behavior Culture serves as the primary factor influencing an individual's desires and actions For instance, the purchasing decisions of individuals living in urban areas differ from those in rural settings, as their behaviors are influenced by the environment in which they were raised.
Cultures are composed of various subcultures, including nationalities, religions, racial groups, and geographic regions, which foster specific identification and socialization among their members As these subcultures become larger and more affluent, companies often create targeted marketing programs to cater to them Multicultural marketing emerged from careful research indicating that different ethnic and demographic groups do not always respond positively to mass marketing strategies For instance, in Vietnam, the growing Islamic consumer base has prompted manufacturers to adopt Halal certification, utilizing it in their marketing efforts to engage this important demographic.
Social class represents enduring and relatively homogeneous divisions within a society, characterized by hierarchical ordering where members share similar values, interests, and behaviors In "Marketing Management – 12th Edition," Philip Kotler categorizes social classes into three groups: (1) lower lowers, (2) upper lowers, and (3) working class.
(4) middle class, (5) upper middles, (6) lower uppers and (7) upper uppers
Different social classes exhibit distinct behaviors, including variations in dress, speech patterns, and purchasing habits For example, a store targeting upper-class customers should feature luxurious decor and offer unique, high-priced products, in contrast to a store aimed at lower-class consumers, which would require a different approach to branding and pricing.
In addition to the cultural factors, the consumers behavious also affected by Social factors as reference groups, family, social roles and statuses
Consumer behavior is significantly shaped by various reference groups, including membership groups where individuals are directly or indirectly influenced by fellow members Primary groups, such as family, friends, neighbors, and colleagues, involve close relationships and frequent interactions In contrast, secondary groups, including religious, professional, and trade unions, are more formal and necessitate less ongoing engagement Additionally, aspirational groups consist of those that individuals aspire to join, further impacting their consumer choices.
Reference groups significantly impact individuals by introducing them to new behaviors and lifestyles, shaping their attitudes and self-concept, and exerting conformity pressures that can influence their product and brand selections Additionally, individuals can be affected by groups they do not belong to, highlighting the broader influence of social dynamics on consumer behavior.
The family of the buyer plays a crucial role in shaping purchasing behavior, with two distinct family types influencing this process The family of orientation, which includes the father, mother, and son, imparts values related to religion, politics, economics, self-worth, and love, significantly impacting the son’s behavior even with minimal interaction In contrast, the family of procreation exerts a more direct influence on the buyer's everyday purchasing decisions.
A buyer's decisions are significantly shaped by personal characteristics such as age, life cycle stage, occupation, economic circumstances, personality, self-concept, and values These factors directly influence consumer behavior, making it crucial for marketers to closely monitor them to effectively tailor their strategies.
Throughout their lives, individuals purchase various goods and services that cater to their changing needs, such as children’s food during childhood, a diverse diet in adulthood, and specialized nutrition for seniors Marketers must pay attention to significant life events and transitions—such as marriage, childbirth, illness, relocation, divorce, career changes, and widowhood—as these can create new consumer needs.
Maslow's hierarchy of needs is a renowned psychological theory that outlines the motivations behind human behavior, emphasizing that individuals are driven by specific needs and desires This concept is typically illustrated as a pyramid consisting of five levels, where lower-level needs must be fulfilled before individuals can address higher-order needs.
Figure 2.2: Maslow's hierarchy of needs (source: Internet)
At the fundamental level, essential needs such as food, water, and sleep are paramount for individuals As one ascends the hierarchy of needs, safety, love, belonging, and esteem become increasingly important, culminating in the ultimate goal of self-actualization.
According to Maslow's theory, individuals prioritize fulfilling their most essential needs before addressing higher-level needs, which can aid marketers in comprehending how different products align with consumers' goals and lifestyles.
THE BUYING DECISION-PROCESS: THE FIVE – STAGE MODEL
Philip Kotler highlights the significance of basic psychological processes in understanding consumer buying decisions, which unfold in five stages: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior This buying process begins well before the actual purchase and has lasting effects afterward It's important to note that consumers may not always follow all five stages linearly; they might skip or reverse certain steps in their decision-making journey.
Figure 2.3: The Five – Stage Model (source: Internet)
The buying process starts when the buyer recognizes a problem or need, example
Hunger, the desire for a new sofa, and a headache illustrate how needs can arise from both internal and external stimuli Internal stimuli occur when a person's basic needs intensify, transforming into a drive, while external stimuli can also trigger the emergence of new needs.
Marketers must identify the specific circumstances that evoke consumer needs by collecting data from various consumers This insight enables them to create effective marketing strategies that capture consumer interest, especially for discretionary purchases like luxury items, vacation packages, and entertainment options Enhancing consumer motivation is crucial to ensure that potential purchases are thoughtfully considered.
An aroused consumer is more likely to seek additional information about a product This search behavior can be categorized into two levels: heightened attention and active information search Heightened attention refers to a state where individuals become more open to product-related information, while active information search involves actively seeking out resources such as reading materials, consulting friends, browsing online, and visiting stores to gather insights about the product.
The information sources which consumers can obtain are falling into four groups: + Personal: family, friend, neighbors, acquaintances
+ Commercial: advertising, website, sales-person, dealers, packaging, displays + Public: mass media, consumer-rating organizations
+ Experiential: handling, examining, using the product
The influence of information sources on consumers varies by product category and buyer characteristics Typically, consumers gather the majority of product information from marketer-dominated commercial sources However, the most impactful insights often stem from personal or independent public sources.
The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set
Consumers assess their purchasing choices by considering product attributes like technical specifications, subjective factors such as brand reputation, and personal experiences gained from sampling or testing products Additionally, reviews from other consumers and companies play a significant role in shaping a consumer's evaluation of a product.
A consumer's purchasing decision involves considerations of where, when, and whether to buy a product For everyday items like groceries, shoppers often choose their preferred store, while electronic purchases typically require browsing multiple retailers Consumers assess each store based on past experiences, available promotions, and the ease of product returns Additionally, a visually appealing store, knowledgeable sales associates, and attractive discounts can significantly impact a buyer's choice.
Perceived risk significantly influences a consumer's decision to change, postpone, or avoid a purchase, as many transactions involve inherent risks This perceived risk varies based on the financial stakes, uncertainty surrounding the purchase, and the consumer's self-confidence To mitigate these risks, consumers often take actions such as avoiding purchases, seeking additional information, and opting for reputable national brands or products that come with warranties Understanding the factors that trigger feelings of risk can help businesses provide valuable information to alleviate consumer concerns and reduce perceived risk.
After making a purchase, consumers assess their satisfaction by evaluating their experience with the store, the product, and its quality This assessment influences their likelihood of repurchasing from the same brand or store Satisfied customers who perceive they received good value for their money are more likely to become repeat buyers and share positive feedback with others.
THE MARKETING MIX STRATEGY
According to Philip Kotler, the marketing mix encompasses the controllable tactical tools that a firm combines to elicit the desired response from its target market This mix includes all the strategies a company can employ to shape demand for its products, categorized into four key components known as the "Four Ps": Product, Price, Place, and Promotion.
Figure 2.4: The Marketing Mix Strategy (source: Internet)
A product is not just a tangible item; it encompasses anything offered to the market to fulfill a want or need This broad definition includes physical goods, services, experiences, events, individuals, locations, properties, organizations, information, and ideas Understanding this expansive view of products is essential for effective marketing strategies.
A product, much like a living being, undergoes a life cycle consisting of four key stages: Introduction, Growth, Maturity, and Decline Understanding this product life cycle is essential for marketers, as it influences marketing strategies and helps in developing tailored approaches for each stage.
Figure 2.5: The product life cycle (source: Internet)
In the introduction stage, the firm seeks to build product awareness and develop a market for the product The impact on the marketing mix is as follows:
+ Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained
+ Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs
+ Distribution is selective until consumers show acceptance of the product
+ Promotion is aimed at innovators and early adopters Marketing communications seeks to build product awareness and to educate potential consumers about the product
In the growth stage, the firm seeks to build brand preference and increase market share Product quality is maintained and additional features and support services may be added
Pricing is maintained as the firm enjoys increasing demand with little competition Distribution channels are added as demand increases and customers accept the product
Promotion is aimed at a broader audience
As a product reaches maturity, sales growth slows down and competition with similar offerings intensifies The key focus shifts to defending market share while maximizing profits To stand out in a crowded marketplace, enhancing product features becomes essential for differentiation from competitors.
Pricing may be lower because of the new competition
Distribution becomes more intensive and incentives may be offered to encourage preference over competing products Promotion emphasizes product differentiation
As sales decline, the firm has several options:
+ Maintain the product, rejuvenating product by adding new features and finding new uses
+ Harvest the product, reduce costs and continue to offer it
+ Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product
In the decline phase of the marketing mix, decisions are influenced by the chosen strategy; for instance, a product may be modified during rejuvenation, while it remains unchanged during harvesting or liquidation Pricing strategies also vary, as prices may be held steady when harvesting, but significantly reduced in the case of liquidation.
Pricing is a crucial element of the marketing mix, known as the "Four Ps," and plays a significant role in product strategy However, determining the right price can be challenging due to the complex relationship between product demand, production costs, and varying levels of market competition.
A company's pricing decisions are affected both by internal company factors and by external environmental factors (below picture)
Figure 2.6: Internal/ External Factors Affecting Pricing Decisions
The market and demand Competition
Internal Factors Affecting Pricing Decisions
Internal factors affecting pricing include the company's marketing objectives, marketing-mix strategy, costs and organization
Before establishing a price, a company must determine its product strategy By carefully selecting its target market and positioning, the company can create a straightforward marketing-mix strategy, including pricing.
Price is a crucial element of the marketing mix that companies utilize to reach their marketing goals It is essential for pricing decisions to align with product design, distribution, and promotional strategies to create a cohesive and successful marketing program.
Costs establish the minimum price a company can charge for its products, ensuring that all production, distribution, and selling expenses are covered while also providing a reasonable return on investment As a key component of pricing strategy, many companies strive to be 'low-cost producers' within their industries By maintaining lower costs, these companies can offer reduced prices, which often leads to increased sales and higher profits.
Management plays a crucial role in determining who within the organization is responsible for setting prices In many small companies, pricing decisions are typically made by top management instead of being delegated to the marketing or sales teams.
In large companies, pricing is typically handled by divisional or product line managers
External Factors Affecting Pricing Decisions
External factors that affect pricing decisions include the nature of the market and demand, competition and other environmental elements
Prices are influenced by costs, which establish a lower limit, while market demand determines the upper limit Buyers, both consumer and industrial, weigh the price of a product or service against its perceived benefits Therefore, marketers must grasp the connection between pricing and demand before establishing their pricing strategies.
B) Competitors' Costs, Prices and Offers
Competitors' costs and pricing, along with their potential reactions to a company's pricing strategies, significantly influence pricing decisions A high-price, high-margin approach can attract more competition, while a low-price, low-margin strategy may deter competitors or eliminate them from the market This dynamic shapes the competitive landscape and impacts the overall pricing strategy of the company.
According to Philip Kotler in "Principles of Marketing," companies implement a pricing structure that varies across their product lines and evolves over time as products progress through their life cycles This pricing strategy is adjusted to reflect fluctuations in costs and demand, as well as the diverse needs of buyers and market conditions Additionally, companies must carefully evaluate the competitive landscape to determine the appropriate timing for initiating or responding to price changes.
Below are some pricing strategies:
A) New-Product Pricing Strategies: A company that plans to develop an imitative new product faces a positioning problem It must decide where to position the product versus competing products in terms of quality and price Companies can use below price positioning strategies of Philip Kotler in pricing for new product
• Premium pricing strategy: producing a high-quality product and charging the highest price
• Economy pricing strategy: producing a lower-quality product, but charging a low price
The overcharging strategy involves setting product prices higher than their quality justifies, which may initially boost profits However, in the long term, customers may feel deceived and cease purchasing, leading to negative word-of-mouth and damage to the brand's reputation Therefore, this approach should be avoided to maintain customer trust and loyalty.
ADVERSTING
Advertising, as defined by Philip Kotler, is a paid, non-personal promotion of ideas, goods, or services through mass media like newspapers, magazines, television, or radio by an identified sponsor Organizations utilize advertising to convey specific messages about their products, services, or behaviors to a targeted audience, aiming to elicit a response.
Many companies rely on external agencies to develop advertising campaigns and manage media buying Currently, advertising agencies are evolving into communications firms that enhance clients' overall communication effectiveness by providing strategic and practical guidance across various communication channels.
Marketing management must make five important decisions when developing an advertising programme:
Figure 2.8: The five M's of Advertising (source: Internet)
To create an effective advertising program, the initial step is to establish clear advertising objectives These objectives should align with decisions regarding the target market, positioning, and marketing mix, as they outline the specific role that advertising will play within the overall marketing strategy.
An advertising objective refers to a defined communication goal aimed at a particular target audience within a set timeframe These objectives can be categorized based on their purpose, which includes informing, persuading, or reminding the audience.
Informative advertising aims to create brand awareness and knowledge of new products or new features of existing products
Persuasive advertising is a component in an overall advertising strategy that seeks to entice consumers into purchasing specific goods or services, often by appealing to their emotions and general sensibilities
Reminder advertising: are aims to stimulate repeat purchase of products and services
Reinforcement advertising: are aims to convince current purchasers that they made the right choice
To effectively set advertising objectives, a comprehensive analysis of the current marketing landscape is essential In cases where the product class is mature, and the company holds a leadership position with low brand usage, the primary goal should be to encourage increased consumption Conversely, if the product class is emerging and the company is not the leader, yet offers a superior brand, the objective should focus on demonstrating this superiority to the market.
B) Deciding on the Advertising Budget
Once the company has established its advertising objectives, the next crucial step is to determine the advertising budget for each product Key factors to consider when setting this budget include market conditions, target audience, competition, and the overall marketing strategy.
In the product life cycle, new products often necessitate substantial advertising budgets to establish brand awareness and encourage consumer trials Conversely, mature brands typically require smaller advertising expenditures relative to their sales figures.
High-market-share brands typically require a greater percentage of their sales to be allocated to advertising compared to low-share brands To build market presence or capture share from competitors, these brands must invest more in advertising than what is necessary to maintain their existing market share.
• Competition and clutter: In a market with many competitors and high advertising spending, a brand must advertise more heavily to be heard above the noise in the market
• Advertising frequency: when many repetitions are needed to present the brand's message to consumers, the advertising budget must be larger
In industries with less product differentiation, such as beer, soft drinks, banks, and airlines, brands must invest heavily in advertising to create a distinct image Effective advertising is crucial for highlighting unique physical benefits or features that set a brand apart from its competitors.
When designing and evaluating an advertising campaign, it's crucial to differentiate between the message strategy and the creative strategy Crafting effective advertising campaigns requires a blend of artistry and scientific approach To develop a robust message strategy, advertisers typically follow three key steps: generating and evaluating the message, advancing creative development and execution, and conducting a social-responsibility review.
D) Deciding on Media and Measuring Effectiveness
Once the message is selected, the advertiser must determine the appropriate media to convey it This involves establishing the desired reach, frequency, and impact, as well as selecting from major media types and specific media vehicles Additionally, the timing of the media and geographical allocation must be considered Finally, it is essential to evaluate the outcomes of these decisions.
CURRENT SALE STATUS OF “KIDDY” OIL BRAND AT CAMBODIA
CAMBODIA AT A GLANCE
Cambodia, officially the Kingdom of Cambodia, is a Southeast Asian country with a land area of 181,035 square kilometers (69,898 sq mi) It shares borders with Thailand to the northwest, Laos to the northeast, and Vietnam to the east, while the Gulf of Thailand lies to the southwest.
Cambodia, home to over 14.8 million people, ranks as the 69th most populous country globally Approximately 95% of its population practices Theravada Buddhism, the official religion The nation is also enriched by minority groups, including Vietnamese, Chinese, Chams, and around 30 different hill tribes Phnom Penh, the capital and largest city, serves as the political, economic, and cultural heart of Cambodia.
In 2009, Cambodia had a GDP per capita of just US$ 782, making it one of the least developed economies globally Although there have been efforts to diversify the economy, it remains predominantly reliant on agriculture, with most of the labor force engaged in this sector As a result, Cambodia has struggled to keep pace with industrial development.
Cambodia became a member of the World Trade Organization (WTO) in 2004, necessitating the establishment of various commercial laws However, the country's ineffective judicial and legal systems, along with inadequate corporate governance, pose significant challenges to attracting Foreign Direct Investment (FDI) As a result, FDI in Cambodia has primarily focused on sectors such as garment manufacturing, services, construction, and tourism.
CAMBODIA COOKING OIL MARKET OVERVIEW
Despite having extensive palm tree plantations, Cambodia lacks a cooking oil factory and only operates a small-scale packaging plant As a result, all cooking oils are imported from countries such as Vietnam, Thailand, Malaysia, and Singapore, with a significant portion of Singaporean and Malaysian oils being routed through Vietnam before reaching Cambodia.
The main import source to Cambodia is Vietnam which accounted for around 51%, Malaysia 17%, Singapore 13%
In the Cambodian market, the preferred packaging sizes for consumers are typically 5 liters, while larger sizes such as 25 kg Jerry Cans and 15 kg tins cater specifically to the Horeca channel.
Figure 3.2: Market share by Packaging size (Calofic Internal Data)
The consumption rate of premium cooking oils in Cambodia remains low, accounting for only about 5% of the total market, primarily due to the low income levels of consumers who tend to opt for cheaper options Brand loyalty, awareness, and perceived quality are also lacking, with most distributors focusing on price-based strategies rather than branding efforts The exception is the Healthy Chef brand from Thailand, which actively promotes itself as a high-end cooking oil through frequent advertising and promotions Additionally, some large wholesalers are planning to establish packaging plants to import and package refined cooking oil from overseas.
Figure 3.3: Brands share total market (Calofic Internal Data)
Due to low income levels, many people in Cambodia seek affordable cooking oil, resulting in RBD Palm Olein accounting for nearly 95% of the oil consumed in the country, while other types of oil, such as soybean oil, remain less popular.
Oil (accounted for 2%), Sunflower Oil (accounted for 1%) also presented in the market by usually consume by high income people
Others Sunbeam Chim Mountain Healthy Chef Oleen Pure Vegetable Oil Cabbag
King CrabOng DiaRolioMarvelaBest CookVocaMRTHBig Prawn
Figure 3.4: type of oil in the Cambodia market (Calofic Internal Data)
PRODUCT OVERVIEW
Children require substantial energy from fats to support their growth and development, with younger children having an even greater need for these nutrients Nutritionists and pediatricians recommend that a child's daily diet include fats from both animal and plant sources to provide a diverse range of fatty acids and essential vitamins.
Kiddy Oil is a specially formulated blend designed for children, combining imported salmon oil, sesame oil, canola oil, and rice bran oil This unique oil provides a rich source of omega-3 fatty acids (DHA and EPA), as well as omega-6 and omega-9, along with essential vitamins, including Vitamin A, to support your child's health and development.
E and more than 20 types of essential fatty acids - substances playing important roles for the comprehensive development of children's brain, sight and body in their early stage of life.
CURRENT SALE STATUS OF “KIDDY” OIL BRAND AT CAMBODIA
Since January 2011, Cai Lan Oils and Fats Company has been selling Kiddy Oil in the Cambodian market through a local agent, utilizing the same distribution channels as its other products, including Cai Lan Cooking Oil and Simply Soyabean Oil, to reach retailers and wet markets.
In January, Kiddy Oil experienced a successful launch, selling 3,280 bottles To enhance market presence, we engaged in various promotional activities, including distributing leaflets to consumers, displaying posters, and providing balloons featuring the Kiddy Oil logo to children in major markets across Phnom Penh.
Sales of Kiddy Oil remained strong in the month following its initial launch; however, a noticeable decline in sales began from April to August The sales performance of Kiddy Oil from January to August is illustrated in the chart below.
Following discussions with the marketing team in Cambodia regarding the decline in sales, we discovered that numerous stocks remain with wholesalers and retailers in wet markets This surplus is primarily due to a lack of consumer demand, preventing the movement of cargo.
Kiddy Oil sales have declined, as internal data from Calofic reveals that consumers perceive little difference between it and other cooking oils The higher price point has led to questions about the benefits of using Kiddy Oil compared to its competitors.
Understanding the unique characteristics of kid's oil is essential for sales agents to effectively educate wholesalers, retailers, and consumers about its benefits In Cambodia, however, many sales agents lack a clear understanding of the product and its key selling points, which hinders their ability to communicate its advantages compared to other products on the market.
To effectively penetrate the kiddy oil market, this project conducts a comprehensive market survey to gain insights into consumer behavior regarding nutritious food for children and to identify the most suitable strategies for the product.
KIDDY OIL’S SWOT ANALYSIS
In other to set the correct strategy for “Kiddy” oil brand, the SWOT analysis has been worked out as below:
• Strong Finance and Marketing support
• High experience in cooking oil business
• Sales team is very new
• Consumer are not aware about products
• Higher price compare to the other oil product
• The 1 ST comer in market
The market for kiddy oil presents significant potential due to limited competition, with Calofic leading as the first mover in the cooking oil segment for children Leveraging its extensive experience in the cooking oil industry, robust financial resources, and a skilled marketing team, Calofic is well-positioned to establish a strong brand presence in Cambodia, supported by a dedicated local partner.
To boost sales of Kiddy Oil in Cambodia, the company should focus on educating consumers about the product, providing training for sales staff, and developing a competitive pricing strategy.
ANALYZING THE MARKET SURVEY’S RESULT
A market survey was conducted in Phnom Penh, Cambodia, involving face-to-face interviews with 300 participants The primary objective of the survey was to gather insights from parents of children aged 6 months to 8 years old.
Mainly the education back groud of interviewee are secondary school and below which accounted for 41.3%, High school is 50%, university, above university are 6.3% and 2.3% respectively
Figure 3.6 Education back groud of interviewee
Average estimated income of interviewee is around USD200 – 500 per month which accounted for 45.7%, USD500 – 700 per month is 30% and above USD900 is 11.7%
Figure 3.7 Estimate income of interviewee
A recent survey reveals that mothers and fathers are the primary purchasers of nutritious food for children, accounting for 97.7% and 55.7% of purchases, respectively While siblings and grandparents also contribute to buying nutritious food for kids, their involvement is significantly less.
Figure 3.8 person involve in purchase nutritious food for kids
In Cambodia, the nutritious foods which the parents supply to the kids are milk powder (72%), fresh milk (75%), enchanced vitamin food (78.7%), Oil for children (12.3%)
Figure 3.9 nutritious food supply to kids
According to the chart, children's oil usage is primarily dominated by Olive Oil, which makes up 75% of the market, while kiddy oil brands account for the remaining 25% The survey indicates that aside from Olive Oil, there are no specialized oils for children, such as salmon oil or other fish oils.
The olive oil market presents significant potential, as current distributors primarily focus on importation and sales without engaging in promotional activities like advertising By investing in branding efforts, we can enhance consumer awareness and educate families about the benefits of our product, ultimately driving increased sales.
Usually the parents before buying the nutritiuos product to their kids, they will get product information through TV advertising (91.3%), specialist (84.30%), family/friend (84%) and retailer (80.3%) (figure 4.5)
Figure 3.10 where consumers get consultant/ reference before deciding to buy
According to the data presented in Figure 4.6, 27.7% of individuals receive advice from doctors, nutritionists, and family or friends regarding the nutritional food for their children, specifically recommending the use of cooking oil.
Figure 3.11 advices from the doctor and nutritionist on using oil for kids
Consumers often purchase olive oil for their children based on recommendations from healthcare professionals, such as doctors and nutritionists Among those who seek advice, 27.70% consult these specialists, and an impressive 91.57% of them are advised to incorporate olive oil into their children's diets.
48.19% to use Salmon Oil and 0.01% to use Canola Oil As per market survey from company, at the moment there is not salmon oil product in Cambodia
Figure 3.12 Kinds of oil which advised from the doctor and nutritionist for kids
Consumers prioritize essential nutrients for their children, with 88.7% recognizing the importance of Calcium, 87.3% valuing Vitamin A, and 88.75% acknowledging Vitamin E This awareness stems from government education initiatives, which also provide free Vitamin A and E supplements to children.
Figure 3.13 Nutritions which good for kids as per Cambodia consumers
Research indicates that DHA, Omega-3, and EPA are essential for children's brain development However, a survey revealed that only 37% of consumers are aware of DHA, 24% know about Omega-3, and a mere 0.7% recognize EPA, highlighting a significant gap in awareness regarding these important nutrients This presents a challenge for Kiddy Oil, which markets its product based on the inclusion of DHA, Omega-3, and EPA derived from salmon oil Conversely, it also offers a substantial opportunity for Calofic, as we are the first company to incorporate these beneficial nutrients into cooking oil, effectively promoting our product's unique advantages.
Mainly the consumers buying the product to their kids from the traditional market which so call wet market (95.3%), Pharmacy (89.3%), Supermarket (43.7%), health care or clinic center for kids (36.7%) etc…(figure 4.9)
Currently, Kiddy Oil is distributed solely through traditional markets However, survey results suggest that there is potential for expansion into additional channels such as pharmacies, supermarkets, healthcare facilities, and clinic centers.
Figure 3.14 where the consumers purchased nutritious food for kids
Despite the significant improvement in the living standards of the Cambodian population, the high cost of products, which constitutes 87.3% of their purchasing considerations, remains a primary concern for consumers when making buying decisions.
Figure 3.15 Factors which affected to buying decision of consumers
Attractive promotion programs (55%) and compelling advertising (72.3%) significantly influence consumer buying decisions, alongside recommendations from family members (66%) In contrast, only 54% of consumers consider the brand, while 52% pay attention to the product's source.
According to market survey data, only 12.30% of parents use cooking oil for their children Additionally, the 2008 General Population Census of Cambodia indicates that children under the age of 9 make up 21.3% of the country's total population.
In 2008, Cambodia's total population reached 13,395,682, with Phnom Penh city housing 1,325,681 residents Among these, approximately 282,370 children under the age of 9 are estimated to live in the city If we assume that 30% of these children can afford to purchase one bottle of "Kiddy" oil per month at a price of USD 3, the monthly market value for this product would be around USD 254,133 Consequently, the overall market potential for "Kiddy" oil in Phnom Penh is estimated to be approximately USD 3 million per month.
Currently, only 12.3% of parents use oil for their children, indicating a significant market potential for "Kiddy" oil in Cambodia To effectively penetrate this market, we have developed targeted market penetration strategies based on comprehensive survey data.
Despite only 54% of consumers focusing on product brands, establishing a strong brand remains crucial as consumer knowledge evolves Currently, Healthy Chef is the sole brand actively engaging in branding for cooking oil in Cambodia, presenting a significant opportunity for Kiddy Oil to strengthen its market presence.
The branding strategy for kiddy oil from year 2011 – 2015 will use the following activities:
MARKET PENETRATION STRATEGY
PRICING AND DISTRIBUTION STRATEGGIES
According to a market survey, only 12.30% of parents use cooking oil for their children Additionally, the 2008 General Population Census of Cambodia revealed that children under the age of 9 make up 21.3% of the country's total population.
In 2008, Cambodia's total population reached 13,395,682, with Phnom Penh city housing 1,325,681 residents Among these, approximately 282,370 children under the age of 9 live in Phnom Penh Assuming that 30% of these children can afford one bottle of "Kiddy" oil, priced at USD 3 each, the monthly market value for this product would be around USD 254,133, leading to an estimated annual market potential of approximately USD 3 million for Phnom Penh city.
Currently, only 12.3% of parents use oil for their children, indicating a significant market potential for "Kiddy" oil in Cambodia To effectively penetrate this market, we have developed targeted market penetration strategies based on comprehensive analysis of survey data.
Market surveys indicate that only 54% of consumers prioritize product branding; however, establishing a strong brand remains crucial as consumer awareness increases Currently, Healthy Chef is the only brand actively engaging in branding for cooking oil in Cambodia This presents a significant opportunity for Kiddy Oil to develop a robust brand presence in the Cambodian market.
The branding strategy for kiddy oil from year 2011 – 2015 will use the following activities:
According to Indochina Research's study on "Media Consumption Habits" in Cambodia, the most popular leisure activities among Cambodians aged 15 to 50 include visiting traditional markets (58%), spending time in parks (53%), and watching television.
(48%) So advertising in TV is the good way to promote Kiddy brand to comsumers
Nearly 98% of household owns a TV screen, the television viewing frequency as below chart:
Figure 4.11: Television viewing frequency (source: Indochina Research)
The channel which watched most often in Cambodia are CTN (TV21) which accounted for 55%, Khemarak Phomin TV (TV5) accounted for 13%, MyTV accounted for 11% (Figure 4.12)
We will broadcast the Kiddy advertisement on CTN and Khemarak Phomin TV, airing it four times a day: once at 7:00 AM, once at 12:00 PM, and twice between 8:00 PM and 9:00 PM According to Indochina Research, these time slots align with peak viewing hours.
The estimated advertising costs for high-viewership channels like CTN and Khemarak Phomin TV range from $70 to $130 for a 30-second spot during daytime, and $220 for the same duration during prime time (7:00-10:00 PM) For channels with lower viewership, the costs are approximately $70 to $120 for daytime and $160 for evening slots during prime time.
Figure 4.12: Channels watched most often (source: Indochina Research)
Figure 4.13: Usual viewing hours (source: Indochina Research)
B) Using Billboard, Poster and Leaflet:
A recent market survey revealed that 58% of Cambodians visit traditional markets for leisure, while an impressive 95.30% purchase nutritious food for their children at wet markets This highlights the importance of organizing branding activities in these markets, as they are a cost-effective alternative to events and television advertising.
Large billboards and posters will be strategically displayed in major wet markets across Phnom Penh, including Aureussey Market, Olympic Market, Central Market, Deumkor Market, Chbar Ampov Market, and Toul Tom Poung Market To further engage consumers, promotional staff will distribute leaflets and provide answers to any product-related inquiries at these bustling market locations.
In Cambodia, the popular mode of transportation known as the "Tuk Tuk" is similar to Vietnam's "Xe Om." Advertising on Tuk Tuks offers an affordable option for promoting the Kiddy brand, with costs approximately USD 12 per Tuk Tuk per month, making it a cost-effective alternative to other advertising methods.
C) Organizing some events and activities at some big kid’s garden
A recent survey indicates that 84.30% of parents seek expert consultations before purchasing nutritious products for their children Given that kiddy oil products are relatively new to the market, organizing a seminar featuring renowned doctors and nutritionists could be beneficial This event would address children's nutritional needs, answer attendees' questions, and promote the kiddy brand as a premium choice for kids The target audience for this seminar would be parents of children aged 6 months to 8 years.
Engaging in activities at major children's gardens, supermarkets, baby shops, and pharmacies, such as distributing free balloons, leaflets, and samples, effectively raises consumer awareness about the product Additionally, participating in the Vietnam High-Quality Trade Fair in Cambodia presents an excellent opportunity to promote products to a broader audience.
To boost consumer interest in Chase products, we can implement promotional strategies such as offering gifts like kid-friendly food trays and spoons from the Kiddy Brand, as well as scratch-and-win opportunities that include prizes like bowls and utensils for children.
Price sensitivity is a critical concern in Cambodia, with 87.30% of survey respondents identifying it as a key factor influencing their purchasing decisions To enhance market share alongside robust branding efforts, companies must develop and implement innovative pricing strategies.
Many consumers prefer using Olive Oil for their kids, which is priced at approximately USD 5.70 for a 0.5L bottle, translating to about USD 2.85 for a 0.25L bottle In contrast, Kiddy Oil is currently priced at USD 3.00 for the same 0.25L size, making it USD 0.15 more expensive than Olive Oil To remain competitive with Olive Oil, it is essential for the company to consider lowering the selling price of Kiddy Oil.